Iraq has shortlisted 12 international companies and consortiums to build the country's first oil export pipeline in decades, and will ask them to submit their bids by the end of this year for an $18 billion project that will make the country less dependent on Persian Gulf export terminals.

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By HASSAN HAFIDH

Iraq has shortlisted 12 international companies and
consortiums to build the country's first oil export pipeline in
decades, and will ask them to submit their bids by the end of
this year for an $18 billion project that will make the country
less dependent on Persian Gulf export terminals, two oil
industry sources said.

Iraq's oil ministry has chosen these companies out of more
than 80 international companies which submitted their
credentials to build a section of the 1,680 km pipeline
stretching from the oil hub of Basra in southern Iraq to
Jordanian port of Aqaba in the Red Sea, the first person
said.

SCOP will invite the short listed companies to receive the
tender package, the second person said. SCOP will also propose
that companies need to submit their offers by November or
December, he added.

Iraq and Jordan signed a preliminary agreement in April to
build the section of the pipeline that would stretch from an
Iraqi oil pumping station in Haditha, west of Iraq, to Aqaba.
The rest of the pipeline, which is 680 km long, linking a Basra
pumping station with the one in Haditha would be built and
financed by the Iraqi oil ministry.

Iraq hopes the pipeline will make it less dependent on
Persian Gulf export terminals, providing the country with an
alternative route if Iran closes the Strait of Hormus. Tehran
has threatened on several occasions to close the strategic
waterway through which 35% of the world's shipborne oil is
exported, most recently in response to international sanctions
over its suspect nuclear program.

Last year Iraq started design and feasibility studies on the
pipeline that's expected to carry 2.25 MMbpd. The country is
now preparing to start work on the section from Haditha to
Aqaba, with a capacity of 1 MMbpd.

A third section of the pipeline, running to Syria's Banias
port in the Mediterranean, has been postponed because of the
conflict in the neighboring country. It would have a capacity
of 1.25 MMbpd.

Under the agreement signed in April, Iraq would supply
energy poor Jordan with 150,000 bpd to feed its Zarqa refinery near Amman. Iraq will also
supply Jordan with 100 MMcfd of gas via another pipeline that
will be built parallel to the oil line.

On Tuesday, Iraq decided to extend an oil export agreement
to supply Jordan with crude for one year, without giving more
details. Iraq exports some 10,000 to 15,000 bpd to Jordan at a
heavily discounted price of dated Brent minus $18 a barrel.

Iraq sits on some of the world's largest oil reserves and
was once a major exporter of crude. It's now trying to rebuild
an industry that was devastated by years of war and
sanctions.

Dow Jones Newswires

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